Transcontinental Inc.

Mesdames et messieurs, merci d'avoir patienté. Et bienvenue à la conférence téléphonique concernant les résultats du troisième trimestre de l'exercice 2023 de TC Transcontinental. Pendant la conférence, tous les participants seront en mode d'écoute. Seulement, une période de questions suivra la présentation et des directives vous seront données à ce moment. Nous désirons vous rappeler que cette conférence est enregistrée aujourd'hui le 7 septembre 2023. Welcome to the TC Transcontinental third quarter of fiscal 2023 results conference call. During the presentation, all participants will be in listen-only mode. Afterwards, we will conduct a question and answer session, and instructions will be provided at that time. As a reminder, this conference is being recorded today, September 7, 2023. I would like to turn the conference over to Yann Lapointe, Director, Investor Relations and Treasury. J'aimerais maintenant céder la parole à Yann Lapointe, Directeur Relations avec les Investisseurs et Trésorerie. Monsieur Lapointe, please go ahead.

Thank you, Joëlle, and good morning, everyone. Welcome to Transcontinental's third quarter fiscal 2023 earnings call. Before we begin, please note that the press release, the MD&E, along with financial statements and related notes, as well as the slide supporting management's remarks, are all available on our website at www.tc.tc under the investor relations section. A replay of this conference call will also be available on our website shortly after the call. Please note that this conference call is intended for the financial community. Media are in listen-only mode and should... ...communications for more information. We have with us today our President and Chief Executive Officer, Thomas Morin, and our Executive Vice President and Chief Financial Officer, Donald Lecavalier. As referenced on slide two, some of the financial measures discussed over the course of this conference call are non-IFRS. You can refer to the MD&A for a complete definition and reconciliation of these measures to IFRS. In addition, this conference call might also contain forward-looking statements. These statements are based on the current expectations of management and information available as of today, and they involve numerous risks and uncertainties, known and unknown. The risk, uncertainties, and other factors that could influence actual results are described in the fiscal 2022 annual MD&A and in the annual information form. With that, I would like to turn the call over to our president and CEO, Thomas Marais.

Thank you, Yann, and good morning to everyone, and thank you for joining the call. Three months have passed since our last call, which was actually my first day as CEO, and I'm pleased to be with you again today. At that time, our executive chair, Isabelle Marcoux, and I shared with you our four priorities. Number one was to grow organically and profitably. Second is to deliver strong return on assets. Third is to reduce our debt. And fourth is to commercialize sustainable products. Aligning the organization on these four priorities has been the focus of my first 90 days, and I'm happy to report that the team has responded very well. We took quick actions to adjust to market conditions, which were more challenging in Q4 than anticipated. These actions enabled us to improve our conversion rate, mitigating the impact of lower volume on our profitability. We also made good progress on working capital by continuing to reduce our inventories, and this is a key component for us to drive our debt down. Part of my agenda was also to review our senior management structure and create a leaner, more focused, and more agile team aligned to deliver on our four priorities. And this was done quickly, and a new executive team was announced mid-August and is now fully hands-on. I also went on the road to better understand our printing business, visiting our plants, meeting our teams and our customers. I must say that I'm impressed by the engagement of our leaders and coworkers, the quality of our assets, and the strength of the relationship with our customers. This has enabled me to see more clearly the potential of our training business, and this includes our more traditional activities. All in all, I'm satisfied with the work accomplished and confident that these actions, taking this quarter and this year, will also benefit us in the long term. Now going back to our results, starting with safety. Our yearly incident rate has decreased by 23% compared to last year, which is obviously a major achievement by the team. Although significant work remains to achieve an injury-free workplace, this is obviously a big step in the right direction. Turning now to our sectors and starting with packaging. Like our peers, we were impacted by market dynamics that we continued destocking, as well as a softening demand due to the economic context. But despite these lower volumes, and thanks to our actions, profits were in line with last year. In terms of commercializing sustainability, While generating profitable growth and better return on assets, let me give you an update on our recycling strategy and come back, of course, on the investment we've announced on August 22nd. First, we took a step back to review our recycling operations and took the strategic decision to move recycling directly into our theme production facilities. By bringing recycling closer to end markets, we are reducing costs and we are better positioned to commercialize products with PCR content. With this evolution, we will be closing a Montreal recycling facility at the end of this month. Second, we've announced a major investment in a new BOP film line to be installed in Asperenburg, South Carolina facility. This new offering is a game changer for our industry and for TC Transcontinental. The superior capability of this film will give us a competitive edge and as a consequence will enable us to gain share as the market evolves towards more sustainability. We are pleased with the early interest shown by many of our key customers. Now, in the printing sector, the measures we took have resulted in significant recurring savings. On the downside, flyer volumes continue to decrease, and books have had a challenging quarter. We will continue to adjust costs to volume and take all the measures necessary to protect profitability. On the positive side, we are pleased with the rollout of our reinvented flyer radar in Montreal in May, as well as in Vancouver last month. and we are now distributing over 1 million copies of Red Earth every week. Also, in the wake of having in-source newspaper volume from Metroland earlier this year, we are taking on new volume from another newspaper publisher, Glacier Media. Glacier made this announcement to its employee earlier this week, actually. In summary, with our key focus on our four priorities and acting with speed and agility, I am confident that we are on the right path. And on that, I will pass it over to you, Donald.